exv10w26



 







Exhibit
10.26


[NOTE: CERTAIN PORTIONS OF THIS DOCUMENT HAVE BEEN MARKED TO INDICATE THAT CONFIDENTIAL INFORMATION HAS BEEN OMITTED. CONFIDENTIALITY HAS BEEN REQUESTED FOR THIS CONFIDENTIAL INFORMATION.
THE CONFIDENTIAL PORTIONS HAVE BEEN PROVIDED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]



November 9, 1994




Mr. Akira Yamamoto

Goodman Company, Ltd.

108 Fujigaoka, Meito-ku

Nagoya-shi 465

Japan




Dear Mr. Yamamoto:



This is to confirm the understanding and agreement that Goodman Company, Ltd. and Kaneko
Enterprises, Inc. (collectively, “Distributor”) and Cardiometrics, Inc. (“Manufacturer”) have
reached regarding that certain International Distributor Agreement (“Prior Agreement”) dated as of
September 17, 1991 between Distributor and Manufacturer. Capitalized terms not otherwise defined in
this letter shall be defined as in the Prior Agreement.





	 	1.	 	Distributor and Manufacturer shall enter into a new 5-year International
Distributor Agreement (“New Agreement”) in the form enclosed with this letter, with
the fixed term of the New Agreement ending on September 17, 1999. Except as provided
below, the New Agreement shall supersede the Prior Agreement.
	 
	 	2.	 	Distributor and Manufacturer agree that Distributor has obtained government
approvals for the Products in the name of Distributor, rather than in the name of
Manufacturer, contrary to the provisions of Section 8(h) of the Prior Agreement.
Distributor and Manufacturer agree that these government approvals may remain in the
name of the Distributor; provided, that Distributor agrees that upon the earlier to
occur of: (a) the giving of notice of termination of the New Agreement pursuant to
Section 8 thereof, or (b) the termination of the New Agreement, it shall take all
necessary actions to transfer these government approvals to the name of the
Manufacturer as promptly as possible, but in any event within ninety (90) days of the
giving of notice or thirty (30) days after termination of the New Agreement, whichever
period ends the soonest. After the transfer of these government approvals has been
made and upon delivery to Manufacturer of Distributor’s customer list for the
Products, Manufacturer shall (i) reimburse Distributor for its reasonable expenses
incurred in effecting such transfers and obtaining official reimbursement from the
Ministry of Health in Japan and certain government approvals, in an amount not to
exceed (U.S.) $250,000, and (ii) pay to Distributor all amounts then due to
Distributor pursuant to Sections 8(c) and 8(e) of the New Agreement.





Cardiometrics Inc., 645 Clyde Avenue, Mountain View, CA 94043

Telephone: 415961.6993 Ÿ Fax 115
961-8753 Ÿ Customer Service: 500
531-FLOW (3569)




 









 










November 9, 1994

Page Two



 



To confirm the foregoing, please sign and return to me the enclosed copy of this letter.




Sincerely,




Cardiometrics, Inc.




	 	 	 	 	 
	By:

	 	/s/ Menahem Nassi
	 	 
	 

	 	 	 	 
	 

	 	Menahem Nassi	 	 
	 

	 	President and Chief Executive Officer	 	 






 




ACKNOWLEDGED AND CONFIRMED:



Goodman
Company, Ltd.




	 	 	 	 	 
	By:

	 	/s/ Akira Yamamoto
	 	 
	 

	 	 	 	 
	Name:

	 	Akira Yamamoto	 	 
	 

	 	 	 	 
	Title:

	 	President	 	 
	 

	 	 	 	 





Kaneko
Enterprises, Inc.




	 	 	 	 	 
	By:

	 	/s/ Masahiko Kaneko
	 	 
	 

	 	 	 	 
	Name:

	 	Masahiko Kaneko	 	 
	 

	 	 	 	 
	Title:

	 	President	 	 
	 

	 	 	 	 





 









 











INTERNATIONAL DISTRIBUTOR AGREEMENT



This
International Distributor Agreement (“Agreement ”) is entered into in Mountain View,
California, as of September 17, 1994 between Cardiometrics, Inc., a California Corporation
with principle offices at 645 Clyde Avenue, California, U.S.A. ( “Manufacturer” ), and GOODMAN
CO., LTD., and KANEKO ENTERPRISES, INC. companies with offices located at Goodman Co., Ltd.,
108 Fujigaoka, Meito-Ku,
 Nagoya, 465 Japan; and Kaneko Enterprises,
Inc. 16241-D Gothard Avenue, Huntington Beach, CA 92647 (
“Distributor”).



In consideration of the mutual promises contained herein, the parties agree as follows:




1. DEFINITIONS




     a) “Products” shall mean those products listed in Exhibit A attached hereto. Products may be
changed, abandoned or added by Manufacturer, at its sole discretion,
provided that Manufacturer gives thirty (30) days’ prior written notice to
distributor. Manufacturer shall be under no obligation to continue the production of any Product,
except as provided herein.



     b) “Territory” shall mean that geographic area identified in Exhibit B attached hereto.



2. APPOINTMENT AND AUTHORITY OF DISTRIBUTOR




     a) Appointment. Subject to the terms and conditions set forth herein, Manufacturer
hereby appoints Distributor as Manufacturer’s sole and exclusive importer and Distributor for the
Cardiometrics stand alone FloMap and Cardiometrics FloWire products as specified in Exhibit A, in
the Territory, and Distributor hereby accepts such appointment.
Manufacturer reserves the right to
appoint value added resellers, original equipment manufacturers
(OEM) and the like (“ Third Party Resellers”) to sell
Products other than disposable guidewire
Products, (“Hardware Products”) in the territory. Manufacturer shall pay no compensation for
Distributor for sales of hardware products by Third Party Resellers in the territory as noted in
2(a) .



     b)
Territorial Responsibility.  Distributor shall pursue aggressive sales
policies and procedures to realize the maximum sales potential for the Products in the Territory.



     c)
Conflict of Interest. Distributor warrants to Manufacturer that it does not
currently represent or promote any



 1





 










 





lines or products that compete with the Products. During the term of this Agreement,
Distributor shall not, without Manufacturer’s prior written consent, represent, promote or
otherwise try to sell within the Territory any lines or products that, in Manufacturer’s
judgement, compete with the Products covered by this Agreement. Immediately prior to the execution
of this Agreement, Distributor shall provide Manufacturer with a list of the companies and
products that it currently represents and shall notify Manufacturer in writing of any new
companies and products at such time as its promotion of those new companies and products
commences.




     d) Independent Contractors. The relationship of Manufacturer and distributor established
by this Agreement is that of independent contractors, and nothing contained in this Agreement
shall be construed to (i) give either party the power to direct and control the day-to-day
activities of the other, (ii) constitute the parties as partners, joint venturers, co-owners or
otherwise as participants in a joint or common undertaking, or (iii) allow Distributor to create
or assume any obligation on behalf of Manufacturer for any purpose whatsoever. All financial
obligations associated with Distributor’s business are the sole responsibility of distributor. All
sales and other agreements between Distributor and its customers are Distributor’s exclusive
responsibility and shall have no effect on Distributor’s obligations under this Agreement.
Distributor shall be solely responsible for, and shall indemnify and hold Manufacturer free and
harmless from any and all claims, damages or lawsuits (including Manufacturer’s attorneys fees)
arising out of the acts or omission of Distributor, its employees or its agents.



3.
TERMS OF PURCHASE OF PRODUCTS BY DISTRIBUTOR




     a) Terms and Conditions. All purchases of Products by Distributor from Manufacturer
during the term of this Agreement shall be subject to the terms and conditions of this
Agreement.



     b) Prices. All prices are F.O.B. (as defined in Section 2319 of the California Uniform
Commercial Code) Manufacturer’s plant currently located at the address listed for
Manufacturer at the beginning of this Agreement. The purchase price to Distributor for each
of the Products (“Purchase Price”) shall be as set forth in Exhibit A attached hereto. The
difference between Distributor’s Purchase Price and Distributor’s selling price to its
customers shall be Distributor’s sole remuneration for sale of the products and for all other
obligations of Distributor under this Agreement. Manufacturer has the right at any time to
revise the prices in Exhibit A with thirty (30) days’ advance written notice to Distributor.
Such revisions shall apply to all orders received after the effective date of revision. Price
increases shall not affect unfulfilled purchase orders accepted by Manufacturer prior to the
effective date of the price increase. Price decreases shall



2









 




apply to pending purchase orders
accepted by Manufacturer prior to the effective date of the decrease but not yet shipped.




     c) Taxes. Distributor’s Purchase Price does not include any federal, state or local
taxes that may be applicable to the Products. When Manufacturer has the legal obligation to
collect such taxes, the appropriate amount shall be added to
Distributor’s invoice and paid by Distributor unless Distributor provides
Manufacturer with a valid tax exemption certificate authorized by the appropriate taxing
authority.



     d) Order and Acceptance. All orders for Products submitted by Distributor shall be
initiated by written purchase orders sent to Manufacturer and requesting a delivery date
during the term of this Agreement; provided, however, that an order may initially be placed
orally or by telex order. To facilitate Manufacturer’s production scheduling, Distributor
shall submit purchase orders to Manufacturer at least ninety (90) days prior to the first day
of the requested month of delivery. No order shall be binding upon Manufacturing until
accepted by Manufacturer in writing, and Manufacturer shall have no liability to Distributor
with respect to purchase orders that are accepted. Manufacturer shall use commercially
reasonable efforts to notify Distributor of the acceptance or rejection of an order and of
the assigned delivery date for accepted orders within thirty (30) days after receipt of the
purchase order.


No partial shipment of an order shall constitute the acceptance or the entire order, absent the
written acceptance of such entire order. Manufacturer shall use commercially reasonable efforts to
deliver Products at the times specified either in its quotation or in its written acceptance of
Distributor’s purchase orders.




     e) Terms of Purchase Orders. Distributor’s purchase orders submitted to Manufacturer
from time to time with respect to Products to be purchased hereunder shall be governed by the
terms of this Agreement, and nothing contained in any such purchase order shall in any way
modify such terms of purchase or add any additional terms or conditions.



     f) Demo Unit. To assure adequate sales support, Distributor agrees, upon the effective
date of this Agreement, to Purchase the Products shown in Exhibit C attached hereto. The
special purchase price set forth in Exhibit C is for the Products to be used by the
Distributor solely as demonstration units. The Products purchased by Distributor as
demonstration units may be sold to end users by the Distributors twelve (12) months after the
delivery date, provided Distributor replace them by purchasing an additional unit of the
same Product at the current Purchase Price.



     g)
Change Order. Distributor may utilize written change orders without penalty for
orders that have not yet been accepted by manufacturer. For orders that have been accepted by




3










 





manufacturer but have not yet been shipped (excluding the initial order under Subsection 3(f)
above). Distributor may utilize written change orders subject to the following conditions.



      i) Distributor may delay delivery of any
accepted order, provided that the rescheduled delivery
date occurs during the term of this Agreement and provided further that Distributor shall pay a
rescheduling fee equal to ten percent (10%) of the Purchase Price (net of freight, taxes and other
charges) of the rescheduled Products if Distributor’s change order is received by manufacturer less
than ninety (90) days before the assigned delivery date.



Unless Manufacturer otherwise agrees, no change order shall be effective unless accompanied by the
rescheduling fee if any, required by the Subsection 3(g)(i).



      ii) Distributor may cancel any order that has been accepted by Manufacturer, provided that if the
written change order is received by Manufacturer less than ninety (90) days before the assigned
delivery date or if the written change order cancels an order that has been previously rescheduled
under Subsection 3(g)(i) above, then Distributor shall pay a cancellation charge equal to
fifteen percent (15%) of the net Purchase Price of the canceled Products. Not withstanding the
above, no order is cancelable fourteen (14) days before scheduled ship date.



      h)
Payment. Full payment of Distributor’s Purchase price for the Products and spare parts
(including any freight, taxes or other applicable costs initially paid by Manufacturer but to be
borne by Distributor) shall be made by Distributor to Manufacturer in U.S. dollars and shall be due
within sixty (60) days from the date of shipment of such Products to Distributor and shall be made
by wire transfer, check or other instrument approved by Manufacturer. Wire transfer shall be made
according to the terms of this agreement to:




	 	 	 
	 

	 	SILICON VALLEY BANK
	 

	 	3000 Lakeside Drive
	 

	 	Santa Clara. CA 95054
	 

	 	Attn: Jane Braun
	 

	 	(408) 654–5664
	 

	 	Account #: 02711508–70/-75





If Manufacturer hereafter determines that it no longer desires to extend credit to Distributor
it shall give written notice to Distributor and thereafter payment shall be effected by means of an
irrevocable letter of credit drawn on a California bank approved by Manufacturer; the letter of
credit shall be upon terms acceptable to Manufacturer, shall allow for partial shipments, and shall
be in an amount equal to Distributor’s Purchase Price for the Products Plus all applicable taxes,
shipping charges, and other charges to be borne by Distributor. All exchange, interest, banking,
collection, and other charges shall be at Distributor’s expense.




4









 







Any
invoiced amount not paid when due shall be subject to a service charge of one and one-half
percent (1.5%) per month or the maximum rate allowed by law, whichever is less. Distributor shall
pay all of Manufacturer’s costs and expenses (including reasonable attorney’s fees) to enforce and
preserve Manufacturer’s rights under this Subsection 3(h).



     i)
Shipping. All Products delivered pursuant to the terms of this agreement shall be packed for
air freight shipment in Manufacturer’s standard shipping cartons, marked for shipment at
Distributor’s address set forth above, and delivered to
Distributor or its carrier agent F.O.B.
Manufacturer’s manufacturing plant, at which time (subject to
Subsection 3(1) below) title to such
Products and risk of loss shall pass to Distributor. Unless otherwise instructed in writing by
Distributor, Manufacturer shall select the carrier. All freight, insurance, and other shipping
expenses, shall be paid by Distributor. Distributor shall also bear all applicable taxes, duties
and similar charges that may be assessed against the products after delivery to the carrier at
Manufacturer’s plant.



     j)
Rejection or Products. Distributor shall inspect all Products promptly upon receipt
thereof and may reject any Product that fails in any material way to meet the specifications sat
forth in Manufacturer’s current brochure for that Product. Any Product not properly rejected within
thirty (30) days after receipt of that Product by Distributor
(“Rejection Period”) shall be deemed
accepted. To reject a Product, Distributor shall, within the Rejection Period, notify Manufacturer
in writing or by FAX of its rejection and request Return Goods
Authorization (“RGA”) number.
Manufacturer shall use commercially reasonable efforts to provide the RGA number in writing or by
FAX to Distributor within fifteen (15) days after receipt of the
request. Within ten (10) days
after receipt of RGA number, Distributor shall return to manufacturer the rejected Product, freight
prepaid, in its original shipping carton with that RGA number displayed on the outside of the
carton. Provided that Manufacturer has complied with its obligations in
this Subsection 3(j), Manufacturer reserves the right to refuse to accept any rejected Products
that do not bear an RGA number on the outside of the carton. As promptly as possible but no later
that thirty (30) working days after receipt by Manufacturer of
properly rejected Products,
Manufacturer shall, at its option and expense, either repair or replace the Products. Manufacturer
shall pay the shipping charges back to Distributor for properly
rejected Products; otherwise,
Distributor shall be responsible for the shipping charges.



     k) Return of Products after Rejection Period. After the Rejection Period. distributor may
not return a product to manufacturer for any reason without Manufacturer’s prior written consent .
For any Product for which Manufacturer gives such consent.
Manufacturer shall charge Distributor a
restocking fee





5










 





equal to fifteen percent (15%) of Distributor’s Purchase price for that Product and in such
case shall credit the balance of the Purchase Price to Distributor’s account. Distributor shall be
responsible for all shipping charges.




     1)
Reservation of Title. Transfer of title for each Product and in such
case shall credit the balance of the Purchase Price to Distributor’s account.
Distributor shall be responsible for all shipping charges.



4.
TRAINING, INSTALLATION, AND SERVICE




     a)
Services by Distributor. Distributor shall have the responsibility to install the
Products, test the installed Products, service and repair the Products, and train the customers
with respect to the Products sold. The services shall be performed only by specially and properly
trained personnel of Distributor and shall be prompt and of the highest quality. Distributor shall
maintain a properly equipped service department as required sufficient to meet the needs of the
Territory, as well as a complete and adequate supply of spare parts to properly service Products
used in the Territory (in accordance with Subsection 6(e) below).



     b) Training by Manufacturer. Manufacturer shall provide sales, service, and repair
training to Distributor’s personnel at periodic intervals, with the frequency and content of the
training to be determined by Manufacturer. When possible, such training shall be given at
Distributor’s facilities, but it may be necessary to provide combined training at a geographically
central location near but not in the Territory. In either case, Manufacturer and Distributor shall
each pay their own costs for travel, food, and lodging during the
training period. In addition to sales and service training, Manufacturer shall cooperate with
Distributor in establishing efficient service procedures and policies.



5. WARRANTY TO DISTRIBUTOR




     a)
Standard Limited Warranty. Manufacturer provides a 1 year warranty on capital
equipment only to distributor for the Products, including the limitations set forth in Subsection
5(b) and 5(c) below. This warranty is contingent upon proper use of a Product in the application
for which it was intended and does not cover Products that were modified without Manufacturer’s
approval or that were subjected by the customer to unusual physical or electrical stress.



     b) No Other Warranty. EXCEPT FOR THE EXPRESS WARRANTY SET FORTH ABOVE, MANUFACTURER
GRANTS NO OTHER WARRANTIES, EXPRESS OR IMPLIED, BY STATUTE OR
OTHERWISE, REGARDING THE PRODUCTS, THEIR



6









 





FITNESS FOR ANY PURPOSE, THEIR QUALITY, THEIR MERCHANTABILITY, NON-INFRINGEMENT OR OTHERWISE.




     c)
Limitations of Liability. MANUFACTURER’S LIABILITY UNDER THE WARRANTY SHALL BE
LIMITED TO A REFUND OF THE CUSTOMER’S PURCHASE PRICE. IN NO EVENT SHALL MANUFACTURER BE LIABLE FOR
THE COST OF PROCUREMENT OF SUBSTITUTE GOODS BY THE CUSTOMER OR FOR ANY SPECIAL CONSEQUENTIAL OR
INCIDENTAL DAMAGES FOR BREACH OF WARRANTY.



6. ADDITIONAL OBLIGATIONS OF DISTRIBUTOR




     a) Annual Purchase Commitment. Attached hereto in Exhibit D is the annual purchase
commitment and required delivery dates with the number of Products to be Purchased by Distributor
from Manufacturer (“Annual Purchase Commitment”). Annually
for 1995 – 1999, Distributor and
Manufacturer shall mutually agree in writing on the Annual Purchase Commitment for the immediately
following calendar year. Throughout the term of this Agreement, if Distributor fails to purchase
(80%) of its Annual Purchase Commitment during any given year, then Manufacturer may terminate this
Agreement by mailing written notice of termination to Distributor, in which case this Agreement
shall terminate immediately. Products returned to Manufacturer under the provisions of Subsection
3(k) above shall not count towards the fulfillment of Distributor’s relevant Annual
Purchase Commitment. Prior to the close of each year, Manufacturer
shall work with Distributor to establish a forecast of annual
purchase commitment for the subsequent year. If the parties are unable to agree on an Annual
Purchase Commitment within sixty (60) days prior to the anniversary date of this Agreement, then an
extrapolation of market growth data based on Manufacturer’s worldwide growth rate will be used to
calculate projected increases for upcoming period.



     b) Forecasts. within the first five days of every month, Distributor shall provide
Manufacturer with a 90 day rolling forecast, attached hereto as Exhibit D, showing prospective
orders by Product model and intended submittal date.



     c)
Promotion of the Products. Distributor agrees to use its best efforts, at its own
expense, to vigorously promote the sale of the Products within the Territory and to develop a
market for the Products and to enhance the Company’s image in the marketplace as a provider of
quality medical devices. Distributor’s obligations shall include, but not be limited to, preparing
promotional materials in appropriate languages for the Territory, advertising the Products in trade
publications within the Territory, participating in appropriate trade shows, and directly soliciting orders from customers
for the Products. At the beginning of this Agreement and the beginning of each calendar year
Distributor and Manufacturer shall mutually agree in writing on the sales promotion



7









 




activities and performance criteria to be met by Distributor for that calendar year. Distributor
shall provide Company with an annual analysis of the market including total market. Such
information shall be provided to enable Manufacturer to assist Distributor in fully developing the
market demand for the Manufacturer’s Products and in developing appropriate marketing and business
plans for the mutual advantage of Distributor and Manufacturer.




     d) Representations. Distributor shall not make any false or misleading
representations to customers or others regarding manufacturer or the Products. Distributor shall
not make any representations, warranties or guarantees with respect
to the specifications, features
or capabilities of the Products that are not consistent with manufacturer’s documentation
accompanying the Products or Manufacturer’s literature
describing the Products, including the
limited warranty and disclaimers.



     e)
Inventory. Distributor shall, at its own expense, maintain a sufficient inventory
of the Products and of spare parts to fulfill its commitments under this Agreement.



     f) Finances and Personnel. Distributor shall maintain a net worth and working capital
sufficient, in Manufacturer’s reasonable judgement, to allow Distributor to perform fully and
faithfully its obligations under this Agreement. Distributor shall devote sufficient financial
resources and technically qualified sales and service engineers to the Products to fulfill its
responsibilities under this Agreement. Distributor additionally agrees to maintain qualified sales
and clinical personnel for the purpose of promoting and servicing the
Products and agrees to provide adequate training to physicians and laboratory
personnel to assist them in the proper use of the Product.



     g)
Customer and Sales Reporting. Distributor shall, at its own expense and consistent
with the sales policies of Manufacturer:



          i) Place the Products in Distributor’s catalogues as soon as possible and feature the Products
in any applicable trade show that it attends;




          ii) Provide adequate contact with existing and potential customers within the Territory on a
regular basis, consistent with good business practice;




          iii) Assist Manufacturer in assessing customer requirements for the Products, including
modifications and improvements thereto, in terms of quality, design, functional capability, and
other features;




          iv)
Submit market research information, as reasonably





8










 





requested
by Manufacturer, regarding competition and changes in the market within the
Territory; and




          v) Provide Manufacturer with the clinical data gathered during the investigational
stage for government approval.




     h) Import and Export Requirements. Distributor shall, at its own expense, pay all
import and export license and permits, pay customs charges and duty fees, and take all other
actions required to accomplish the export and import of the Products purchased by Distributor.
Distributor understands that Manufacturer is subject to regulation by agencies of the U.S.
government, including the U.S. Department of Commerce, which prohibit export or diversion of
certain technical products to certain countries. Distributor agrees to comply with all export laws
and restrictions and regulations of the Department of Commerce or other United States or foreign
agency or authority, and not to export, or allow the export or reexport of any Proprietary
Information or Product or any direct product thereof in violation of any such restrictions, laws or
regulations or to Afghanistan, the People’s Republic of China or any Group Q, S, W, Y or Z country
specified in the then current Supplement No. 1 to section 770 of the U.S. Export Administration
Regulations (or any successor supplement or regulations); Manufacturer shall obtain any necessary
licenses and/or exemptions with respect to the export from the U.S. of all material or items
deliverable by Manufacturer.



     i) Limitation on Distributor’s Right to the Product. Distributor shall have no access
to or rights in the source codes of any software included in the Products. Distributor shall have
no right to copy, modify or remanufacture any Product or part thereof and will comply with
Manufacturer’s standard Confidentiality Agreement attached hereto as Exhibit E. The term sell or
sale does not apply to the software components of the Products, such software is licensed pursuant
to Manufacturer’s standard end-user agreement.



7. ADDITIONAL OBLIGATIONS OF MANUFACTURER




     a)
Materials. Manufacturer shall promptly provide Distributor with existing marketing
and technical information concerning the Products as well as reasonable quantities of brochures,
instructional material, advertising literature, reasonable sample allotment, and other Product data,
with all such material printed in the English language.



     b)
Responses to Inquiries. Manufacturer shall promptly respond to all inquiries from
Distributor concerning matters pertaining to this Agreement.



     c)
Testing. Manufacturer shall test all Products before



9









 







shipment to Distributor.



     d) Delivery Time. Manufacturer shall minimize delivery time as much as possible and
use commercially reasonable efforts to fulfill delivery obligations as committed in acceptances.



     e) Territorial Inquiries. Manufacturer shall submit to Distributor any inquiry
originating from the Territory rather than answering the inquiry directly.



     f) Quotations to Exporters. Manufacturer shall refrain from giving quotations to
exporters for products to the shipped to the Territory.



     g) New Developments. Manufacturer shall inform Distributor of new product developments
relating to the products.



8. TERM AND TERMINATION




     a) Term. This Agreement shall be effective from the date hereof and shall continue in
force for a fixed term of five (5) years unless terminated earlier under the provisions of
this Section 8. At the end of the fixed term, this Agreement shall terminate automatically without
notice unless prior to that time the term of the Agreement is extended by mutual written consent of
the parties.



     b)
Terminator with Cause. If either party defaults in the performance of any provision
of this Agreement, then the non-defaulting party may give written notice to the defaulting party
that if the default is not cured within thirty (30) days the Agreement will be terminated. If the
non-defaulting party gives such notice and the default is not cured during the thirty-day period,
then the Agreement shall automatically terminate at the end of that period.



     c)
Termination without Cause. Manufacturer may terminate this Agreement upon ninety
(90) days written notice to Distributor provided (1) upon Distributor’s request Manufacturer will
repurchase all products owned by Distributor and all demonstration
units and sales literature at Manufacturer’s cost, (2)
Manufacturer pays to Distributor a
commission of five percent (5%) of the sales price of all Products sold in the Territory by anyone
for a period of six (6) months after the date of termination and (3) Manufacturer complies with its
other obligations under Sections 8.



     d) Termination
for Insolvency. This Agreement shall terminate, without notice, (i) upon
the institution by or against Distributor of insolvency, receivership or bankruptcy proceedings or any
other proceedings for the settlement of Distributor’s debts. (ii) upon Distributor’s making an
assignment for the benefit of




10










 





creditors,
or (iii) upon Distributor’s dissolution or ceasing to do business.




     e)
Fulfillment of Orders upon Termination. Upon termination of this Agreement for other
than Distributor’s breach, Manufacturer shall continue to fulfill, subject to the terms of Section
3 above, all orders accepted in writing by Manufacturer prior to the date of termination.



     f)
Return of Materials. All trademarks, trade names, patents, copyrights, designs,
drawings, formulas or other data, photographs, samples, literature, and sales aids of every kind
shall remain the property of Manufacturer. Within thirty (30) days after the termination of this
Agreement, Distributor shall prepare all such items in its possession for shipment, as Manufacturer
may direct at Manufacturer’s expense. Distributor shall not make, use, dispose of or retain any
copies of any confidential items or information which may have been intrusted to it. Effective
upon the termination of this Agreement, Distributor shall cease to
use all trademarks, marks, and
trade names of Manufacturer.



     g) Limitation on Liability. In the event of termination by either party in accordance with any of
the provisions of this Agreement, neither party shall be liable to the other, because of such
termination, for compensation, reimbursement or damages on account of the loss of prospective
profits or anticipated sales or on account of expenditures,
inventory, investments, leases or
commitments in connection with the business or goodwill of Manufacturer of Distributor. Termination
shall not, however, relieve either party of obligations incurred prior to the termination.



     h) Government Approvals. All government approvals or registration will be obtained under
the Manufacturer’s name by the Distributor and all costs involved will be borne by Distributor.
Upon termination of this Agreement for any reason, Distributor, shall take all necessary steps to
transfer any government approvals for each Product to Manufacturer or Manufacturer’s nominee (or if
such transfer is not permitted to cooperate in the cancellation of Distributor’s government
approvals and the reissuance thereof to Manufacturer or Manufacturer’s nominee). Distributor shall
promptly return to Manufacturer all data and information relating to such products and make no
further use thereof. Additionally, Distributor represents and warrants that neither this Agreement
(or any term hereof) nor the performance of or exercise of rights under this Agreement, is
restricted by, contrary to, in conflict with, ineffective under, requires registration or approval
or tax withholding under, or affects Manufacturer’s proprietary rights (or the duration thereof)
under, or will require any compulsory licensing under, any law or regulation of any organization,
country, group of countries or political or governmental entity located within or including all or
a portion of the Territory.



11









 





     i)
Survival of Certain Terms. The provisions of Sections 3(h), 3(L), 5, 6(h), 8, 9,
10, 11, 12, and 13 shall survive the termination of this Agreement for any reason. All other rights
and obligations of the parties shall cease upon termination of this Agreement.



9.
LIMITATION ON LIABILITY




     MANUFACTURER
SHALL NOT BE RESPONSIBLE OR LIABLE WITH RESPECT TO ANY SUBJECT MATTER OF THIS
AGREEMENT OR THE AGREEMENT OF WHICH IT IS A PART OR ANY ATTACHMENT, PRODUCT ORDER, SCHEDULE OR
TERMS AND CONDITIONS RELATED THERETO UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER
THEORY:



     a) FOR LOSS, COST OF PROCUREMENT OF SUBSTITUTE GOODS, SERVICES OR TECHNOLOGY,



     b) FOR ANY INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES INCLUDING, BUT NOT LIMITED TO LOSS OF
REVENUES AND LOSS OF PROFITS; OR



     c) FOR ANY MATTER BEYOND ITS REASONABLE CONTROL.



10.
PROPERTY RIGHTS AND CONFIDENTIALITY




     a) Property Rights. Distributor agrees that Manufacturer owns all right, title, and
interest in the product lines that include without limitation the Products and in all of
Manufacturer’s patents, trademarks, trade names, inventions, copyrights, know-how, and trade
secrets relating to the design, manufacture, operation or service of
the Products. The use by
Distributor or any of these property rights is authorized only for
the purposes herein set forth,
and upon termination of this Agreement for any reason such authorization shall cease.



     b)
Sales Conveys no Right to Manufacturer or Copy. The Products are offered for sale
and are sold by Manufacturer subject in every case to the condition that such sale does not convey
any license, expressly or by implication, to manufacture, duplicate or otherwise copy or reproduce
any of the Products. Distributor shall take appropriate steps with its customers, as manufacturer
may request to inform them of and assure compliance with the restrictions contained in this
Subsection 10(b).



     c) Confidentiality. Distributor acknowledges that by reason of its relationship to certain
information and materials concerning Manufacturer’s business, plans, customers, technology, and
products that are confidential and of substantial value to
Manufacturer, which value would be
impaired if such information were disclosed to third parties. Distributor agrees that it will not
use in any way




12










 





for its own account or the account or the account of any third
party, nor disclose to any third party, any such confidential information revealed to it by Manufacturer. Distributor shall take every
reasonable precaution to protect the confidentiality of such information.
Upon request by Distributor, Manufacturer shall advise whether or not it
considers any particular information or materials to be confidential
Distributor shall not publish any technical description of the Products
beyond the description published by Manufacturer (except to translate the
description into appropriate languages for the Territory). In the event
of termination of this Agreement, there shall be no use or disclosure by
Distributor of any confidential information of Manufacturer, and
Distributor shall not manufacture or have manufactured any devices,
components or assemblies utilizing any of Manufacturer’s confidential
information.





	11.	 	TRADEMARKS AND TRADE NAMES






     a) Use. During the term of this Agreement, Distributor
shall have the right to indicate to the public that it is an authorized
distributor of Manufacturer’s Products and to advertise (within the
Territory) such Products under the trademarks, marks, and trade names
that manufacturer may adopt from time to time (“Manufacturer’s
Trademarks”). Any and all use of the Manufacturer’s Trademarks shall
inure to Manufacturer’s sole benefit. Distributor shall not alter or
remove any manufacturer’s Trademark applied to the Products at the
factory. Except as set forth in this Section 11, nothing contained in
this Agreement shall grant to Distributor any right, title or interest in
manufacturer’s Trademarks. At no time during or after the term of this
Agreement shall distributor challenge or assist others to challenge
Manufacturer’s Trademarks, marks or trade names confusingly similar to
those of Manufacturer.



     b) Approval of Representations. All representations of
Manufacturer’s Trademarks that Distributor intends to use shall first be
submitted to Manufacturer for approval (which shall not be unreasonably
withheld) of design, color, and other details or shall be exact copies
of those used by Manufacturer. If any Manufacturer’s Trademarks are to
be used in conjunction with another trademark on or in relation to the
Products, than Manufacturer’s mark shall be presented equally legibly,
equally prominently, and of greater size than the other but nevertheless
separated from the other so that each appears to be a mark in its own
right, distinct from the other mark.




	12.	 	PATENT, COPYRIGHT, AND TRADEMARK INDEMNITY





     a) Indemnification. Distributor agrees that Manufacturer
has the right to defend, or at its option to settle, and
Manufacturer agrees, at its own expense, to defend or at its option to
settle,



13









 





any claim, suit or proceeding brought against Distributor or its
customer on the issue of infringement of any United States patent,
copyright or trademark by the Products sold hereunder or the use thereof,
subject to the limitations hereinafter set forth. Manufacturer shall have
sole control of any such action or settlement negotiations, and
Manufacturer agrees to pay, subject to the limitations hereinafter set
forth, any final judgement entered against Distributor or its customer on
such issue in any such suit or proceeding defended by Manufacturer.
Distributor agrees that Manufacturer at its sole option shall be relieved
of the foregoing obligations unless Distributor or its customer notifies
Manufacturer promptly in writing of such claim, suit or proceeding and
give Manufacturer authority to proceed as contemplated herein, and, at
Manufacturer’s expense, gives Manufacturer proper and full information
and assistance to settle and/or defend any such claim, suit or
proceeding. If the Products, or any part thereof, are, or in the opinion
of Manufacturer may become, the subject of any claim, suit or proceeding
for infringement of any United States patent, copyright or trademark, or
if its adjudicatively determined that the Products, or any part thereof,
infringe any United States patent, copyright or trademark, or if the
sales or use of the Products, or any part thereof, is, as a result,
enjoined, then Manufacturer may, at its option and expense either: (1)
procure for Distributor and its customers the right under such patent,
copyright or trademark to sell or use, as appropriate, the Products or
such part thereof; or (ii) replace the Products, or part thereof, with
other suitable Products or parts; or (iii) suitably modify the Products,
or part thereof; or (iv) if the use of the Products, or part thereof, and
refund the aggregate payments paid therefore by Distributor, less a
reasonable sum for use and damage. Manufacturer shall not be liable for
any costs or expense incurred without its prior written authorization.




     b) Limitation. Notwithstanding the provisions of Subsection
12(a) above, Manufacturer assumes no liability for (i) infringements
covering completed equipment or any assembly, circuit, combination, method or process in which any of the Products may be used but not
covering the Products when used alone; (ii) trademark infringements
involving any marking or branding not applied by Manufacturer or
involving any marking or branding applied at the request of Distributor;
or (iii) infringements involving the modification or servicing of the
Products, or any part thereof, unless such modification or servicing was
done by Manufacturer.



     c) Entire Liability. The foregoing provisions of this Section 12
state the entire liability and obligations of Manufacturer and the
exclusive remedy of Distributor and its customers, with respect to any
alleged infringement of patents, copyrights, trademarks or other
intellectual property rights by the Products or any part thereof.




14










 






13. GENERAL PROVISIONS




     a) Governing Law and Jurisdiction. This Agreement shall be governed
by and construed under the laws of the State of California and United States
without regard to conflicts of laws provisions thereof and without
regard to the United Nations Convention on Contracts for the International
Sale of Goods. Unless otherwise elected by Manufacturer in writing for a particular
instance (which Manufacturer may do at its option), the sole jurisdiction and venue
for actions related to the subjected matter hereof shall be the California state and
U.S. federal courts having within their jurisdiction the location of Manufacturer’s
principal place of business. Both parties consent to the jurisdiction of such courts
and agree that process may be served in the manner provided herein for giving
of notices or otherwise as allowed by California state or U.S. federal law. In any
action or proceeding to enforce rights under this Agreement, the prevailing party
shall be entitled to recover costs and attorneys’ fees. Distributor hereby expressly
consents to (i) the personal jurisdiction of the federal and state courts within
California, (ii) service of process being affected upon it by registered mail sent
to the address set forth at the beginning of this Agreement, and (iii) the
uncontested enforcement of a final judgement from such court in any other
jurisdiction wherein Distributor or any of its assets are present.



     b) Entire Agreement. This Agreement sets forth the entire agreement
and understanding of the parties relating to the subject matter herein and merges
all prior discussions between them. No modification of or Agreement, shall be
effective unless in writing signed by the party to be charged.



     c) Notices. Any notice required or permitted by this Agreement
shall be in writing and shall be sent by prepaid registered or certified mail,
return receipt requested, addressed to the other party at the address shown at the
beginning of this Agreement or at such other address for which such party gives
notice hereunder. Such notice shall be deemed to have been given three (3) days
after deposit in the mail.



     d)
Force Majeure. Non-performance of either party shall be excused (except for payment of monies and confidentiality) to the extent that performance is
rendered impossible by strike, fire, flood, governmental acts or orders or
restrictions failure of suppliers, or any other reason where failure to perform is
beyond the
reasonable control of and is not caused by the negligence of the non-performing party.



     e)
Nonassignability and Binding Effect. A mutually agreed
consideration for Manufacturer’s entering into this Agreement is the reputation,
business standing, and goodwill already honored and enjoyed by Distributor under
its present ownership, and accordingly, Distributor agrees that its rights and
obligations



15









 







under this Agreement may not be transferred or assigned directly or indirectly without the prior
written consent of Manufacturer. Subject to the foregoing sentence, this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their successors and assigns.



     f) Legal Expenses. The prevailing party in any legal action brought
by one party against the other arising out of this Agreement shall be entitled, in
addition to any other rights and remedies it may have, to reimbursement for its
expenses, including court costs and reasonable attorney’s fees.



     g) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which together
shall constitute one instrument.



	 	 	 	 	 	 	 	 	 
	 	 	 	 	     GOODMAN CO., LTD.	 	 
	 	 	 	 	 	 	 
	 	 	 	 	                    DISTRIBUTOR	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	     KANEKO ENTERPRISES, INC.	 	 
	 	 	 	 	 	 	 
	 	 	 	 	                    DISTRIBUTOR	 	 
	 
	 	 	 	 	 	 	 	 
	CARDIOMETRICS, INC.	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	BY:

	 	/s/ Menahem Nassi
	 	BY:
	 	/s/ Akira Yamamoto	 	 
	 

	 	 

   Menahem Nassi
	 	 	 	 

  Akira Yamamoto
	 	 
	 
	 	 	 	 	 	 	 	 
	TITLE:

	 	     President and CEO

	 	TITLE:
	 	     President
	 	 
	 

	 	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	BY:

	 	/s/ Michael J. Sorna
	 	BY:
	 	/s/ Masahiko Kaneko	 	 
	 

	 	 

Michael J. Sorna
	 	 	 	 

Masahiko Kaneko
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	     Vice President ,	 	 	 	 	 	 
	TITLE:

	 	   Int’l
Sales & Operations

	 	TITLE:
	 	     President
	 	 
	 

	 	 

	 	 	 	 

	 	 







16










 






EXHIBIT
A

TO

EXCLUSIVE DISTRIBUTION AGREEMENT

As of September 2, 2004

Description of VOLCANO Products and Pricing







	 	 	 	 	 
	Distributor Name:
	 	Goodman Company, Ltd.
	Distributor Territory:
	 	Japan









	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	CATALOG	 	 	 		 	 
	 	PRODUCT	 	 	NUMBER	 	 	 	LIST PRICE (EACH)	 	 
	 	Functional Measurement Products:
	 	 	 	 	 	 	 	 	 	 	 
	 	WaveMap
	 	 	 	6000	 	 	 	[CONFIDENTIAL]USD	 
	 	SmartMap
	 	 	 	6500	 	 	 	[CONFIDENTIAL]USD	 
	 	SmartWire
	 	 	640X, 640XJ	 	 	[CONFIDENTIAL]USD	 
	 	WaveWire
	 	 	140X, 140XJ	 	 	[CONFIDENTIAL]USD	 
	 	FloWires
	 	 	840X, 840XJ	 	 	[CONFIDENTIAL]USD	 
	 	PC III Upgrade (SmartCable Upgrade)
	 	 	 	8200	 	 	 	[CONFIDENTIAL]USD	 
	 	ComboMap
	 	 	 	2500	 	 	 	[CONFIDENTIAL]USD	 
	 	* Any travel costs associated with installation are not included in product cost.
	 	 	 	 	 	 	 	 	 	 	 
	 








			
	n	 	All prices are quoted “each’’ and in US Dollars
	 
	n	 	Volcano Therapeutics’ Terms are FOB Origin, net thirty (30) days.








	 	 	 	 	 
	 
	 	 
	Distributor Authorized Signature and Date
	 	VOLCANO Authorized Signature and Date






17









 










EXHIBIT A (Cont’d)




For all new and additional Products for which Cardiometrics is the
sole owner, Goodman Co., Ltd. and Kaneko Enterprises, Inc. will be
given right of first refusal to represent new product in territory defined in Exhibit B.




	 	 	 	 	 	 	 
	 	 	 	 	     GOODMAN CO., LTD.
	 	 	 	 	 
	 	 	 	 	                    DISTRIBUTOR
	 
	 	 	 	 	 	 
	 	 	 	 	     KANEKO ENTERPRISES, INC.
	 	 	 	 	 
	 	 	 	 	                    DISTRIBUTOR
	CARDIOMETRICS, INC.	 	 	 	 
	 
	 	 	 	 	 	 
	BY:

	 	/s/ Menahem Nassi	 	BY:	 	/s/ Akira Yamamoto
	 

	 	 
	 	 	 	 
	 

	 	     Menahem Nassi
	 	 	 	     Akira Yamamoto
	 
	 	 	 	 	 	 
	TITLE: President and CEO	 	TITLE: President
	 
	 	 

	BY:

	 	Michael J. Sorna	 	BY:	 	/s/ Masahiko Kaneko
	 

	 	 
	 	 	 	 
	 

	 	      Michael J. Sorna
	 	 	 	     Masahiko Kaneko
	 
	 	 	 	 	 	 
	 

	 	           Vice President,	 	 	 	 
	TITLE: Int’l Sales
& Operations	 	TITLE: President
	 
	 	 







18









 





EXHIBIT B




TERRITORY




Distributor’s Territory shall be all portions of the following:




JAPAN




	 	 	 	 	 	 	 
	 	 	 	 	     GOODMAN CO., LTD.
	 	 	 	 	 
	 	 	 	 	                    DISTRIBUTOR
	 
	 	 	 	 	 	 
	 	 	 	 	     KANEKO ENTERPRISES, INC.
	 	 	 	 	 
	 	 	 	 	                    DISTRIBUTOR
	CARDIOMETRICS, INC.	 	 	 	 
	 
	 	 	 	 	 	 
	BY:

	 	/s/ Menahem Nassi	 	BY:	 	/s/ Akira Yamamoto
	 

	 	 
	 	 	 	 
	 

	 	     Menahem Nassi
	 	 	 	    Akira Yamamoto
	 
	 	 	 	 	 	 
	TITLE:
President and CEO
	 	TITLE:
President

	 
	 	 	 	 	 	 
	BY:

	 	/s/ Michael J. Sorna	 	BY:	 	/s/ Masahiko Kaneko
	 

	 	 
	 	 	 	 
	 

	 	     Michael J. Sorna
	 	 	 	     Masahiko Kaneko
	 
	 	 	 	 	 	 
	 

	 	           Vice President,	 	 	 	 
	TITLE:
Int’l Sales & Operations
	 	TITLE:
President








19